Review: Ukraine and the Empire of Capital

Ukraine “is pregnant with the next Maidan“, argues Yuliya Yurchenko in her impressive book, published late in 2017. The conditions in Ukraine that led to the upheavals of the winter of 2013-2014 have deepened. Since then, conflict in the Donbas has cost over 10,000 lives and has displaced at least 2.6 million people. In Yurchenko’s view, the state of war may divert public anger from the Kyiv government for now, but it increases the probability that a new Maidan will take an even more violent form than the last.

Ukraine and the Empire of Capital is a Marxist account of the evolving political economy of Ukraine from the late Soviet period to the present day. With its wealth of empirical data (this book is a dense read at times), and its concern with the material conditions of working class Ukrainians, it is a refreshing change from much of the recent commentary on Ukraine. The book also holds a more general interest for readers of this website for its account of the late Soviet economy, neoliberalism and contemporary imperialism.

The book’s central argument is that during the 1990s, competing groups of oligarchs dominated the post-Soviet transformation of Ukraine, simultaneously impoverishing and disenfranchising the Ukrainian working class, and causing a degree of frustration for external actors who saw the Ukrainian economy as a promising site for the expansion of neoliberal capitalism. This was achieved partly through a careful manipulation of Ukraine’s geopolitical situation: Yurchenko compares the multi-vector foreign policy of President Kuchma (1994-2005) to the latter’s favourite card game, Preferans. At the same time, the oligarchs sought to deflect popular resistance, and settle scores with their rivals, by fabricating a ‘myth of two Ukraines’.

In what Yurchenko calls the “Bloody Winter” of 2013-14, the chickens came home to roost. In late 2013, President Yanukovych (2010-2014) decided against signing a Deep and Comprehensive Free Trade Agreement (DCFTA) with the EU, and instead signed an ‘Action Plan’ with Putin, and forced a raft of anti-protest laws through parliament. The sudden withdrawal from the DCFTA, but more significantly the repression of protesters provoked the explosion of anger that then brought down Yanukovych. Manufactured divisions now provided a pretext for Russian intervention and the annexation of Crimea (“an act of imperial entitlement”) and allowed violent opportunists to bring Ukraine to a state of civil war. Currently, the reign of the oligarchs in Kyiv continues, albeit that of a different fraction. Uncertain times lie ahead. The DCFTA entered into force in July 2016, opening up the Ukrainian economy to foreign capital to an unprecedented degree. This may spell trouble for some Ukrainian capitalists, but it will also mean further dispossessions and hardships for the working class.

There is a subsidiary argument that will interest those who view the USSR as a ‘state capitalist’ society, as Tony Cliff, founder of the International Socialist current, did. Yurchenko, who does not subscribe to this view, traces the development of capitalism in Ukraine back into the Soviet period. The overwhelming orientation of the Soviet command economy towards military-industrial production generated a significant shadow economy in consumer goods, especially from the 1960s onwards. The Perestroika reforms of the late 1980s effectively decriminalised existing shadow economic activities and allowed the institutionalisation of an already existing ‘criminal-political nexus’, involving those working in the informal economy and Komsomol, Red directors and Communist Party members. This background is crucial to Yurchenko’s account of the different fractions of capital that formed in post-Soviet Ukraine, but she argues that the USSR itself cannot be considered capitalist “as there was no formal space for capital accumulation or production” (p. 35).

However, even on the formal side of the economy, it can be argued that the central relations of production were between those who controlled capital (the nomenklatura), and those who sold their labour power for a wage, albeit in a highly controlled labour market. The fascinating discussion of the particular labour conditions in the Donbas is relevant in this context. Workers had been drawn there from across the Soviet Union to exploit its coal reserves: this was an area with a large concentration of prison labour, but also with high wages to attract workers. As Yurchenko shows, this shaped the dynamics of labour protest there in both Soviet and post-Soviet Ukraine.

More generally, Yurchenko is very good at reminding her readers that features of the Ukrainian “state-society-capital” complex, such as state repression, media manipulation or corporate crime, are typical features of neoliberalism more broadly. One interesting finding of her very detailed analysis of different lobbying groups active in Ukraine, is that while EU and US lobbyists certainly have been able to influence government policy, they have often been surprised to find they have not enjoyed the success they are used to in Brussels or Washington (p. 122). Just as the ‘state capitalist’ theory was designed as a theory of capitalism as a whole, and not just of the USSR and similar societies, Yurchenko’s analysis of the role of the shadow economy in both Soviet and post-Soviet Ukraine provides many insights that could helpfully be reflected back onto other capitalist societies before and during the neoliberal period.

This is a book that makes no concessions to imperialism in any form: it is unequivocal in its condemnation of Russia’s actions in Donbas and Crimea, but it is equally clear that NATO expansion and the DCFTA do not serve the interests of working class people living in Ukraine. At the same time, it refuses to reduce the discussion of events in Ukraine to geopolitics. While former US Secretary of State Joe Biden may have had a personal motivation for wanting to topple Yanukovych (Biden’s son wanted to bid for shale gas resources then controlled by the latter’s son), Yurchenko is dismissive of the notion that the US orchestrated a coup. Yurchenko refuses to call the 2013-2014 events, which have led to the continuation of oligarchic rule and the degeneration of the country into civil war a “revolution of dignity”, but nor does she accept that there was a “fascist coup”, even if the far right was present within both the Maidans and the anti-Maidans. With its clear-eyed analysis of the crimes that have been committed for the sake of accumulation by both Ukrainian and non-Ukrainian actors, and its solidarity with those who have attempted to resist, this book is worthy of its dedication: “to the victims of capital”.

Ukraine and the Empire of Capital: From Marketisation to Armed Conflict, by Yuliya Yurchenko (2017), is published by Pluto Press.

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